Easy Returns Boost Web Sales: Study

By Staff -- TWICE, 11/3/2008

CAMBRIDGE, MASS. — CE e-tailers with generous return policies have the ability to grow long-term sales, loyalty and incremental revenue.

According to the results of a study conducted by Forrester Consulting for UPS, "Most electronics retailers tend to view overly-generous and overt return policies as a 'margin-drain' and believe their efforts are best spend engaging in initiatives to help avert returns altogether."

Conversely, consumers said they viewed the idea of returning an item purchased online as a hassle often caused them to reduce their online spending levels altogether, Forrester said.

Based on its findings, the market research firm surmised, "Returns policies are a bigger factor in consumers' online buying decisions than most retailers realize. Businesses [that] make it easier and less expensive for customers to return their products derive an advantage over competitors — and are likely to, in the long term, see increases in sales, customer loyalty and incremental revenue."

Among customers who had specifically purchased electronics in the past six months, Forrester found that:

72 percent were likely to shop at an electronics retailer with a flexible returns policy;
29 percent were likely to shop at one with an inflexible policy;
73 percent said they would recommend an electronics retailer with a flexible policy to others; and
24 percent would recommend one with an inflexible policy.